Deputy Attorney General Lisa Monaco was unequivocal in announcing the Department of Justices’s new enforcement priorities: the agency will be increasing scrutiny over corporations, their employees and, in particular, their executives.
On Thursday, Oct. 28, Lisa Monaco gave the keynote address at the ABA’s 36th National Institute on White Collar Crime. Monaco talked in detail about the department’s renewed focus on corporate compliance, announced new guidance on corporate prosecution and highlighted areas ripe for new regulation. In order to sustain its reinvigorated focus on corporate actors, the department is surging resources to prosecutors and investigators. The department’s increased scrutiny on individual actors comes on the heels of other enforcement developments, such as an increased focus cyberattacks, data breaches and cryptocurrencies. The government’s hope is that these new tools will raise the specter of liability, which will in turn drive corporate compliance.
Monaco also used the speech to announce three concrete changes to the DOJ’s approach to white-collar crime. First, the department will “restore prior guidance making clear that to be eligible for any cooperation credit, companies must provide the department with all non-privileged information about individuals involved in or responsible for the misconduct at issue.” Under this new guidance, companies facing prosecution are no longer entitled to self-determine which actors were substantially involved, and whose information needs to be turned over. Instead, companies will have to open up access to all individuals, even those with minimal or peripheral involvement.
Second, when deciding what resolution to offer a target company, the department will now “consider the full criminal, civil and regulatory record of any company.” That means, for example, that a company charged with an FCPA violation will have their entire record scrutinized by every corner of the department—including the Tax Division, the Environment and Natural Resources Division, the money laundering sections and even the U.S. Attorney’s Offices.
Finally, the department will begin to implement corporate monitors as a matter of course.
Together, the department’s new guidance represents a dramatic increase in prosecutorial scrutiny and a significant entanglement of subject matter. When faced with an investigation, corporate counsel will no longer be able to decide which information they are required to reveal. Instead, in each action, companies will be forced to turn over troves of information and subject a litany of employees to governmental scrutiny. This widened aperture will necessarily capture high-ranking officers, employees with less-sophisticated backgrounds and those who are not familiar with government investigations. The new guidance also demands that corporate counsel have a clear and complete picture of their company’s liability because even unrelated violations now bear heavily on each and every resolution. Even after resolution, companies will have to navigate their work under the eye of a corporate monitor, leaving little room for error.
Monaco ended by previewing reforms the department is considering, such as refusing to offer Non Prosecution Agreements (NPAs) and Deferred Prosecution Agreements (DPAs) for “recidivist companies,” requiring stricter adherence to the terms of NPAs and DPAs and the formation of a new advisory group within the department.
This enforcement-heavy environment demands a team which can counsel clients with a range of backgrounds, can supply expertise across disciplines and makes decisions informed by decades of experience working with or as regulators. The attorneys in our Government Investigations & White Collar Defense group have counseled a range of clients facing federal investigations, from officers of multinational corporations to entrepreneurs who are entering the business environment for the first time. Whether your company is navigating the evolving compliance landscape or responding to an ongoing investigation, our experienced team of legal professionals are prepared to assist when the need arises.
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